Prior Lake was first incorporated as a village in 1891. Prior Lake is one of the oldest cities in the south metro area. The city's modern rapid growth is due in part to the ease of access for commuters, the rest of the region, via the upgraded State Highway 13.[6][7]

As of the 2000, the median income for a household in the city was $75,363, and the median income for a family was $81,011. The per capita income for the city was $32,089. About 1.7% of families and 12.4% of the population were below the poverty line.

As of the census[2] of 2010, there were 22,796 people, 8,447 households, and 6,211 families residing in the city. The population density was 1,476.4 inhabitants per square mile (570.0/km2). There were 8,882 housing units at an average density of 575.3 per square mile (222.1/km2). The racial makeup of the city was 91.0% White, 1.5% African American, 1.6% Native American, 3.0% Asian, 0.5% from other races, and 2.4% from two or more races. Hispanic or Latino of any race were 2.1% of the population.

There were 8,447 households of which 40.1% had children under the age of 18 living with them, 61.3% were married couples living together, 8.1% had a female householder with no husband present, 4.1% had a male householder with no wife present, and 26.5% were non-families. 20.7% of all households were made up of individuals and 6.7% had someone living alone who was 65 years of age or older. The average household size was 2.69 and the average family size was 3.14.

The median age in the city was 37.8 years. 28.6% of residents were under the age of 18; 5.9% were between the ages of 18 and 24; 28.9% were from 25 to 44; 27.4% were from 45 to 64; and 9.3% were 65 years of age or older. The gender makeup of the city was 49.7% male and 50.3% female.

Prior Lake is governed by a mayor and four council members serving at large. The city Mayor and Council are elected non-partisan. The city mayor is Ken Hedberg, who won an uncontested election in 2012, succeeding Mike Myser who did not run for reelection after gaining office in 2009 after the previous mayor, Jack Haugen, decided not to run for reelection. The council members are Richard Keeney, Vanessa Soukup, Mike McGuire, and Monique Morton. The city is run by a City Manager, Frank Boyles. The city is in Minnesota Legislative District 35A. The district 35 Senator is Eric Pratt (R). The district 35A Representative is Tony Albright (Republican).

Portions of the Shakopee Mdwakanton Sioux Community (SMSC) tribal lands are within the boundary of the City of Prior Lake as annexed in 1972. The SMSC is a federally recognized Indian tribe formally organized under federal reservation status in 1969. The overlap of a Minnesota Statutory City with federally recognized Indian Tribal lands resulted in litigation to clarify the boundary and voting rights. In a 1984 United States District Court ruling, the court affirmed that the municipal boundary of the City of Prior Lake did include the tribal lands in question. The Court further clarified that the tribal residents were thus residents of the City of Prior Lake entitled to vote in municipal elections and to emergency police, fire, and rescue services. The Court ordered the City to provide emergency services on an equal basis as all other residents even though the federal trust status of the tribal lands deprives the City of the authority to tax the tribal lands to fund such services. In recent years, the SMSC has paid the City of Prior Lake for the cost of those emergency services on a voluntary basis.[9]

Following the 1999 Columbine High School Massacre, journalist Elinor Burkett spent a year following students and teachers in Prior Lake High School. She chose Prior Lake as her subject because it was found to be virtually identical to Columbine demographically. She documented her experience in the book Another Planet: A Year in the Life of a Suburban High School (ISBN 0-06-050585-0).

The Mystic Showroom at the Mystic Lake Casino and Hotel in Prior Lake is an entertainment venue thet frequently features A-list musical and comedy performers.

The City of Prior Lake is within the Prior Lake-Savage School District. Prior Lake -Savage Area Schools (PLSAS) serve students in the communities of Prior Lake, Savage, Credit River Township, Spring Lake Township, Sand Creek Township, and Cedar Lake Township.

Prior Lake High School

Bridges Alternative Learning Center

Hidden Oaks Middle School

Twin Oaks Middle School

Edgewood School

Five Hawks Elementary

Glendale Elementary

Grainwood Elementary

Jeffers Pond Elementary

Westwood Elementary

Redtail Ridge Elementary

SAGE Academy

Prior Lake also has a private Roman Catholic parochial school, St. Michael Catholic School, which serves grades PreK through 8. Prior Lake also has a Lutheran church Missouri Synod parochial school,St. Paul's Lutheran School Prior Lake, which serves children from infant through grade 8.

Prior Lake (named after Charles Prior, of the Chicago, Milwaukee, and St. Paul railroad) is made up of two sections, Upper Prior Lake and Lower Prior Lake. The area of each is 354 and 810 acres (3.3 km2) respectively. Upper prior Lake flows Northerly, draining into the larger, Lower prior Lake via a navigable channel that runs under Eagle Creek Avenue Scott County Highway 21. Prior Lake is an extremely popular lake for fishing and water sports. Prior Lake is also popular with snowmobilers and can be accessed using the Scott County Snowmobile Trail and other designated trails in the winter. On April 10, 2009, zebra mussel shells were discovered on the shore of Lower Prior Lake. On April 14, the DNR confirmed that the Zebra Mussels were also in Upper Prior Lake.

The eastern portion of Spring Lake along Scott County Road 12 is also located within the City of Prior Lake. Spring Lake, with 290 acres, but being a few minutes further out from the metro area offers similar recreational opportunities as Upper Prior Lake with a more rural character and less traffic. Spring Lake, being several feet higher in elevation, flows north, into Upper Prior Lake via a non-navigable spillway and culvert under County Road 12.